S&P cuts Carlstar, notes to B-

S&P said it lowered its corporate credit rating on Carlstar Holdings LLC to B- from B.

The outlook is negative.

At the same time, the agency downgraded its issue-level rating on the company's $250 million senior secured notes to B- from B. The 4 recovery rating on the debt is unchanged, indicating an expectation for average (upper half of the 30%-50% range) recovery in the event of a payment default.

S&P said the downgrade reflects its expectation that the company's leverage will remain above 10 times over the next 12 to 18 months due to continued weakness in the company's agricultural and outdoor power equipment end-markets.

Carlstar's operating performance was worse than expected during the first half of the year because of weaker volumes and pricing pressure in its agricultural and high-speed trailer segments.

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